Founded by Dr. Katie Rodan and Dr. Kathy Fields, Rodan & Fields (“Rodan + Fields”) is a leading premium skincare brand. Its unique technology-driven social enterprise platform changed the way people shop for products and care for their skin.
In 2007, the company named Lori Bush to be the President and Chief Executive Officer. Under her leadership, revenue has skyrocketed from $56.9 million in 2011 to $1 billion in 2016. She built a system that “allows for agility and adjustments at the product strategy and business strategy level.”
Before her departure from R+F, we caught up with her to understand how her agile leadership has set up the company to be the #1 skincare brand in the US. (source: rodanandfields.com)
Today, she is the Chairwoman of the New Avon’s Board of Managers.
What do you think about the direction where the Direct Selling industry is going. Are you seeing any emerging trends?
Lori Bush: We see digital technology playing a major role in the transformation of direct selling. It is modernizing direct selling. It is turning it into a relevant go to market strategy for consumer product companies today. Back in 2008, when we launched a system based on a digital transactional business model, it gave us a tremendous amount of information. For the first time, we were able to see where the product is going and who’s buying it. Moreover, the data allowed us to become more strategic. It also provided us with the transparency that the regulatory and political community is looking at today.
How important is data to you and how do you apply that data to better your business?
Lori Bush: We invested pretty heavily in business intelligence. The commerce transactions data gathered from our consultants and their customers allowed us to reach a new level of granularity. We know who our customers are; what are the crossover practices and products that they use; what their customers expect from say premium e-commerce company. Ultimately, it allows us to identify where the real opportunities. From there, we are able to apply data science to customize the experience for any individual whether it’s the business platform offerings or the product portfolio. We are providing our independent consultants’ opportunities to service their customers more intelligently and compellingly.
One can argue that there are multiple parallels between the sharing or gig economy and the direct selling model. What are your thoughts on the classification of employee versus independent contractor?
Lori Bush: From the beginning, we’ve been mindful of ensuring that. As we further developed aspects of our business platform, we created a separation between independent consultants, customers, and the company. At the end of the day the customers are not Rodan & Fields customers, they are the customers of our independent consultants. It’s essential that our independent consultants maintain that independent contractor status. Also, we worked to create platforms to give them more or less a cockpit and a dashboard, if you will, to service their customers.
There is a particular checklist that a company can go through to determine whether somebody is an independent contractor. And, there are platform services we would love to provide to our consultants that arguably could move them more towards employee status. So I agree with the commissioners of the FTC that technology is changing everything. It’s going to go forward. And, we’re going to have to start thinking of new ways of looking at contractors and employees that don’t fit their current definitions. Also, as an outcome of that, Alan Krueger, former chief of the president’s Council of Economic Advisers at Princeton University, has been leading an initiative around creating the third classification between employee and an independent contractor.
Do you think there’s an opportunity for the Gig economy and direct selling space to come together and bring value to one another?
Lori Bush: I don’t know if it’s about coming together. I see it as coexisting. One of the things that I love about our form of direct selling is the scalability aspect of it that you don’t necessarily get in gig economy business opportunities. They fit different people in different ways. The big thing is that the world is changing and I see both within direct selling as well as other industries that are impacted by digital technologies. We are moving forward, and so collectively we need to be looking at what the future looks like, embracing it and being agile in our approach to our future because things are changing at a very rapid pace.
You’ve been on the board of the DSA now for some time. Can you talk to me a little bit about your vision for DSA in general and how you see that moving us forward?
Lori Bush: As an association, we can make the most significant impact at the regulatory level. Changing the public perception at the consumer level doesn’t make sense because the companies that are the Direct Selling Association are different from each other. OUR business plans are different. Our products are different. Party plan companies are different from network marketing. So we have to be mindful of how different all the companies are and think about how we can have a common voice.
You’re in San Francisco. You see a lot of money spent on innovation. Billions of dollars invested in technologies designed to help e-commerce and others. However, I don’t see anything like that happening around businesses that are focusing on helping direct selling. Do you have any thoughts on why that is you think it is?
Lori Bush: Yeah I think it’s because we think of ourselves as something different. Perhaps more like the potential beneficiaries of what’s going on. We’re sitting here on the fifth floor of 60 Spear Street; if I take you up upstairs, you will see our tech sandbox and the environment intended to bring in tech talent and drive tech innovation. And part of that innovation is our ability to reach out to partner and others. We believe that real innovation comes at the intersection of different thinking, different ideas, different disciplines, apart from the direct selling business model.
To hear the entire podcast, press on the button play, next to the logo. Want to read more? Check out Nu Skin’s Ryan Napierski on Megatrends disrupting Direct Selling Industry